Insights

Westpac (ASX:WBC)’s had a shocker: This is when to buy

Stocks for the big bank have been slaughtered the past couple of days. So is it ripe for bargain hunting now?
The post Westpac (ASX:WBC)’s had a shocker: This is when to buy appeared first on The Motley Fool Australia. –

Westpac Banking Corp (ASX: WBC) shares this week have suffered one of the most spectacular falls seen for an ASX large cap in “peacetime”.

On Tuesday afternoon, the bank stock had plunged 3%, bringing the total loss in just one-and-a-half days to 10.4%.

Ouch.

Investors were trampling over each other to flee the building after Westpac’s results on Monday disappointed the market.

Macquarie, Goldman Sachs, Bell Potter and Morgan Stanley analysts all cut their target stock prices after the announcement.

But the company remains one of Australia’s big four banks, with a market capitalisation of $84.7 billion.

At current share prices, it’s giving out a dividend yield of 3.86% which will head up even more after this month’s 60 cent payout.

So, is it now getting to a point where the share price might offer a bargain pickup?

Be patient if you want to pick up Westpac shares

Market Matters portfolio manager James Gerrish reckons it’s not quite time to pounce on Westpac shares yet.

“The positives of a $3.5 billion buyback and 60c fully franked dividend couldn’t mask the issues under the hood,” he said in a subscriber newsletter.

“Higher costs and weaker margins are an unhealthy combination but there is a turnaround underway, it simply comes down to whether or not we believe it’s making sufficient progress.”

Gerrish’s team is keeping a close eye to see if Westpac shares can sink to $23.

“We have been targeting the $23 as an optimum area to buy WBC and that still looks reasonable,” said Gerrish.

“Another 3% to 3.5% lower and we see value plus an enticing dividend of around 5%.”

If you’re interested, you may not have to wait long. 

The share price has continued to fall even after Gerrish made those comments on Tuesday morning. Westpac shares started the day at $23.78 but already sat at $23.06 in the afternoon.

The bank will begin its share buyback on 17 November, while it will go ex-dividend on Monday for payment on 21 December.

This week’s bloodbath was as much a case of unfulfilled lofty expectations as it was poor performance.

Multiple analysts had rated Westpac as a “buy” last month, expecting attractive numbers, dividend and buyback.

The post Westpac (ASX:WBC)’s had a shocker: This is when to buy appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

More reading

Here are the 3 most heavily traded ASX 200 shares so far on Tuesday

Why Ingenia, IAG, Vulcan, and Westpac shares are dropping

ASX 200 (ASX:XJO) midday update: Netwealth’s merger proposal, IAG sinks

Why this top broker downgraded Westpac (ASX:WBC) shares

5 things to watch on the ASX 200 on Tuesday

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!